The coronavirus pandemic shows that Tesla is just like every other automaker (TSLA)

Kyle Grillot/Reuters

• As the COVID-19 coronavirus pandemic has swept across Europe and North America, the auto industry has effectively shut down.
• Tesla has also stopped making cars at its factory in Fremont, California.
• While Tesla has definitely improved many aspects of the automobile, when it comes to building cars, it's in the same difficult position the rest of the industry.
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The North American and European auto industries have shut down as the COVID-19 coronavirus pandemic intensifies. After initially avoiding a suspension of production, even as the San Francisco Bay Area went on lockdown, Tesla has also idled its factory in Fremont, California.

For years, many Tesla enthusiasts have argued that the company was different from every other carmaker. They have attributed that to many things: its all-electric focus, its no-dealership sales model, over-the-air software updates, stunning performance numbers, and of course the charisma of its CEO, Elon Musk, who also runs a rocket outfit, SpaceX.

I've insisted that while Tesla has improved a lot of things about the automobile and has certainly produced some impressive cars, when you get right down to it, we're still talking about wheels, doors, motors, steering columns, brakes — and the workforce to bolt all that stuff together.

Auto plants are vastly more automated than they were at the dawn of the industry, when Henry Ford developed the moving assembly line an hired the huge workforce to make it move. But they still require a lot of people — thousands, typically, to keep a modern factory humming for three shifts.

In North America and Europe, those people have all gone home, and they aren't likely to return until next month at the earliest. General Motors, Honda, and Toyota, for example, have all extended their March 30 restart plans, and while Ford is talking about mid-April for a few plants in the US, it's unclear whether the United Auto Workers agrees with that schedule.

China, after bearing the initial brunt of the pandemic, is just now making tentative efforts to restart the shutdown parts of its massive car-making capability. The healing process could take time. 

Tesla has a factory in Shanghai, and although it was shutdown for a period of time, it's coming back online. So the company is manufacturing vehicles, just not in the US. Carmakers obviously have to make cars to have a business, and the fact that they operate in numerous countries does help to spread the risk around.

But it's become quickly apparent to anyone paying attention that while Tesla has at times looked like the future — and has created a viable market for electric vehicles where there formerly was none — its nuts-and-bolts operations exist in the present. 

Does this mean that Tesla shouldn't be more highly valued, financially, than a legacy player? Its market capitalization, even after collapsing from vertiginous heights achieved earlier this year, remains much higher than its peers, who have been steadily profitable since the financial crisis and have far exceeded Tesla's sales.

Not necessarily, if you grant that Tesla's stock price is a bet on the future. But Tesla-as-an-investment and Tesla-as-a-business are two different things right now. 

And as far as the business goes, it's in exactly the same position as the carmakers it has allegedly been so different from, for all these years.

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See Also:

• Airline employees are safe from being laid off for now, but United warns that job cuts may be on the horizon if the coronavirus pandemic rages on for as long as expected
• United Auto Workers union confirms the death of third Fiat Chrysler plant worker due to COVID-19
• Cruise lines, crippled by the coronavirus, could be left at sea by government aid that's going to airlines and other businesses

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